Professional Conduct, Independence and Quality Assurance
Conduct and independence
Candidates must know the Code of Ethics principles in practice: integrity in reporting, objectivity in judgement, confidentiality of information, and competence through continuing professional development. Independence requires organisational separation and a reporting line that protects the internal audit function. Objectivity requires avoiding conflicts of interest, disclosing gifts and relationships, and abstaining from audits where objectivity is impaired.
Quality assurance
Quality assurance has two layers. Internal assessments include ongoing supervision and periodic self-assessment; external assessments are performed at least once every five years by a qualified independent assessor or assessment team, and the results are reported to the board. The chief audit executive must establish and maintain a quality assurance and improvement programme, and disclose conformance and any non-conformance. Performance is measured against the Standards and the charter.
Traps
A common trap is treating the external assessment as optional or as an internal review. Another: assuming independence means isolation - the internal audit function must still communicate and coordinate with management and other assurance providers. Questions may also test that gifts and hospitality that could influence judgement must be declined or disclosed, and that confidentiality survives the end of employment.
Rule of thumb
For conduct questions, ask: would a reasonable outsider see a conflict? If yes, disclose and step back. For quality, remember: internal annually, external every five years, reported to the board.
Worked example
An internal auditor is asked to audit a department where a close relative is the head. Correct answer: declare the conflict, decline the assignment, and arrange reassignment; the impairment is documented and managed, and the audit proceeds independently.